General Motors closing 1,100 dealerships | Economy | -- Your State. Your News.

May 03rd
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General Motors closing 1,100 dealerships

chevy_optGeneral Motors on Friday informed approximately 1,100 dealerships around the country that they would be closed by October of 2010. The cuts represented approximately 18 percent of the once-giant automobile company’s 5,969 outlets.

General Motors, which said it eventually plans to cull its dealer network by 40 percent, said most of the dealerships were losing money and were in danger of closing anyway.

"Approximately 1,100 underperforming and very small sales volume U.S. dealers will be advised that GM does not see them as part of its dealer network on a long-term basis. In most cases, existing franchise agreements run through October of 2010," the company said in a statement.

The announcement came a day after Chrysler said it was closing 789 of its dealerships, including 30 in New Jersey. Unlike Chrysler, GM said it had no plans to release the names of the dealerships, saying it was up to the individual outlets as to when they wanted announce their respective closures.

“We have said from the beginning that our dealers are not a problem, but an asset for General Motors,” said Mark LaNeve, GM vice president of sales service and marketing, in a statement to the media. “However it is imperative that a healthy, viable GM have a healthy, viable dealer body that cannot only survive but prosper during cyclical downturns. It is obvious that almost all parts of GM, including the dealer body, must get smaller and more efficient.”

The National Automobile Dealers Association said the cuts will impact more than 63,000 dealership employees.

“We view GM's action with a profound sense of sadness and disappointment,’’ the group said in a statement. “GM's decision comes through no fault of the dealers, who are, in many cases, family-run businesses that have been loyal partners with GM -– through good times and bad – for multiple generations.’’

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